Canada’s communications industry will need the government to lower fees and drop taxes if it is to be competitive and bring in new investment, the head of telecommunications giant Rogers Communications Inc. (TSX:RCI.B) said Thursday.
“We support a healthy, productive regulatory framework but it must meet the following criteria: will it spur innovation, will it create a level playing field and will put the interests of consumers first?” CEO Nadir Mohamed told shareholders in Toronto.
“Lower fees and taxes so that we can spur innovation in our industry’s ability to invest in the future” Mohamed said in a message to the federal government to work with the communications industry to keep it competitive.
He also warned that while regulation is necessary, too much ends up as a barrier to progress and that rules governing the telecommunications industry must put the needs of consumers first.
The federal government signalled in the recent throne speech that it wants to open up telecommunications sector, which includes cable and satellite TV and wireless services, to foreign competition. But Mohamed said any rules must apply equally to all players in the industry.
New wireless player Wind Mobile is 65 per cent owned by Egyptian telecom Orascom, which also owns much of its debt. The CRTC ruled it wasn’t Canadian owned and controlled before the federal government overturned that decision last December.
He also said the federal government must make regulated radio spectrum for telecom services available in a timely manner. Such spectrum is needed to carry messages over wireless networks used by a growing number of mobile devices such as mobile phones and laptops.
Rogers is putting an emphasis on consumers who email, text and surf the Internet on their smartphones to drive its growth.
The use of these data services now makes up 26 per cent of total wireless network revenues.
In its first-quarter financial results released this week, Rogers reported it earned $380 million or 64 cents a share in the three months ended March 31. That’s up from $309 million or 49 cents a year ago.
Mohamed said the communications industry is stimulating economic growth.
“The industry is bringing people together and connecting them ways we didn’t think imaginable 10 years ago,” he said.
“It has redefined the world around us and it means we government and industry working together have an important responsibility to get it right.”
Shares in Rogers were up 89 cents at $35.89 in afternoon trading Thursday on the Toronto Stock Exchange.
Meanwhile, the Federation of Canadian Municipalities has launched a campaign in Vancouver saying that municipalities subsidize telecommunications companies when they lay and install equipment on public property. The federation said it amounts to almost $110 million a year and the issue is more urgent with the possibility that foreign ownership restrictions could be loosened.